MICHAEL PAGE GLOBAL HR BAROMETER 2013
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1 GLOBAL HR BAROMETER 2013 The HR roadmap a shared strategic goal, yet different regional priorities
2 CHANGING HR LANDSCAPE EDITORIAL GLOBAL HR BAROMETER CONTENT Welcome to this report. > Key Findings /8 More than ever before, leaders in Human Resources face a host of challenges in all aspects of their business. At Michael Page, we observe this daily in our work with HR departments around the world. To provide a deeper understanding of these challenges and to explore the most pressing HR priorities, we conducted a global survey in the fourth quarter of Drawing on our experience in specialist recruitment, we designed this survey to provide an informed perspective on some of the priorities and challenges you may have to address in your own organisation in the roles of HR leaders from those who walk the walk every day. We hope you agree that the survey makes interesting reading. It confirms that HR is about both attracting and recruiting the best talent and driving staff engagement. It also reveals a multi-faceted HR community across the world, having to deal with a complex, changing landscape comprising diversified economic settings and talent market conditions. Yours truly, Michael Page > HOW DIFFERENT MARKET REALITIES / 11 DRIVE DIFFERENT PRIORITIES > HR ROADMAP A SHARED STRATEGIC GOAL, YET DIFFERENT REGIONAL PRIORITIES TALENT ACQUISITION: A VITAL NEED BUT ALWAYS A TOUGH CHALLENGE RETAINING EMPLOYEES: IS IT TIME FOR A FRESH APPROACH? HR LEADERS, THE PEOPLE BEHIND THE PEOPLE DESCRIPTION OF THE HR JOB DESCRIPTION OF THE HR LEADER / 12 / 14 / 18 / 23 / 24 / 26 Our thanks go to all participants in the survey. Their contribution has been invaluable in helping us to gather extremely useful insights into NEW TOOLS SHAPING TOMORROW S HR HR PEOPLE: EXPERIENCED & INTERNATIONAL / 30 /
3 MICHAEL PAGE More than 4,300 HR leaders around the world shared their opinions with us (main countries)
4 METHODOLOGY & THANKS INDUSTRIES IN WHICH RESPONDENTS WORK Michael Page conducted a comprehensive online survey among HR managers and directors from September to November Respondents work in a broad range of companies of all sizes and in an entire spectrum of industries. CONSUMER GOODS 6% TECHNOLOGY 9% ENERGY 4% RETAIL 6% A total of 4,348 of these HR leaders from around the world answered the same questions, constituting a sufficient sample from which to draw valid comparisons and identify cross-regional and crosscountry differences. To create a truly global picture with meaningful regional representation in the results, the data has been weighted based on GDP per region. PUBLIC SECTOR 3% HEALTHCARE 6% INDUSTRIAL MANUFACTURING 25% LEISURE 2% COUNTRIES WHERE RESPONDENTS WORK (number of HR leaders surveyed by region or country) AUSTRALIA BELGIUM BRAZIL CANADA CHINA INCL HONGKONG FRANCE GERMANY ITALY MEXICO NETHERLANDS POLAND PORTUGAL RUSSIA SPAIN SWITZERLAND TURKEY UNITED KINGDOM UNITED STATES REST BUSINESS SERVICES 13% $ FINANCIAL SERVICES 8% LOCAL COMPANY SIZE 1-99 > % 21% 16% 14% LOGISTICS 3% 42% OTHER 15% 6 7
5 EXECUTIVE SUMMARY Key findings HR leaders face a two-fold challenge: to deliver on corporate goals while maximising staff engagement on a global basis. This places HR firmly at the centre of corporate business in Despite the global economic crisis, 86% of companies surveyed are ready to hire new employees. However, a good half of respondents report that the search for suitable candidates candidates is very difficult or difficult. In the current tough climate for talent acquisition, HR leaders are now ready to capitalise on all available options for sourcing talent and there is a trend toward multi-channel talent sourcing. However, there is still heavy reliance on agencies, with the vast majority of respondents stating that recruitment consultancies remain one of the best routes to finding and recruiting employees in general, and the best route to recruiting at managerial level and above. Employee retention at the heart of company strategy Employee retention is just as important as recruitment: 93% of companies surveyed have a strategy for improving employee satisfaction. The traditional solutions of offering training and development and increasing compensation and benefits are still the main options for engaging staff commitment, despite the latter being the most challenging to achieve, according to the survey. In and in especially, the capacity of organisations to play the reward inflation game has become much more limited. In the area of training and development, the focus continues to be on training for hard skills. However, retention needs to be about recruiting the right managers and developing their soft skills. After all, these fine-tuned leadership skills have a trickle-down effect on the entire workforce. Therefore, retention is a goal that forward-thinking HR leaders should anticipate, especially when hiring managers into their business. HR strategy on course toward culture and performance Corporate culture and performance management are the top HR priorities influencing corporate strategy. They are particularly strong in more developed economies such as, Australia and. By contrast, in compensation and benefits are more relevant. This is also true of, which adds talent acquisition and recruitment to the list of priorities. HR and the business environment If we take willingness to stay put as an indicator, HR leaders seem fairly happy with their jobs: globally 34% have been in their current position for over ten years, which means there are very high reserves of experience on the HR scene. But HR is evolving. Cutting-edge tools are transforming HR functions into knowledge centres that have to strengthen their understanding of the best way to manage change, retain employees, create a better corporate culture... There s a seemingly endless list of challenges. Increasingly, HR leaders are expected to drive corporate strategy with their knowledge. Efficient tools are the essential engine for achieving this. According to HR leaders, recruitment consultancies and multi-channel talent sourcing are highly popular when it comes to winning over the best talent. When employees smile, the whole company smiles with them this makes it essential to retain good managers and develop their leadership skills. It s vital for HR leaders to keep pace with changing times and develop knowledge in order to drive corporate strategy. 86% of the surveyed companies are planning to hire in % of the surveyed companies plan to work on employee retention 95% of HR leaders are using information systems to handle HR tasks 8 9
6 HOW DIFFERENT MARKET REALITIES DRIVE DIFFERENT PRIORITIES 10 11
7 MICHAEL PAGE HR ROADMAP A SHARED STRATEGIC GOAL, YET DIFFERENT REGIONAL PRIORITIES TOP PRIORITIES PER REGION (in % of respondents; multiple responses possible) ASIA 55 Compensation & benefits 53 Talent acquisition & recruitment 44 Performance management Michael Page s global HR survey brings to light a number of key insights, one of which is particularly fascinating. Within an overarching strategy of delivering on the business objectives, HR leaders are faced with several poles of priorities: winning over talent, engaging employees, recruiting the right managers... The list goes on. The ranking of these priorities, in turn, is based on region: is the country of operation an emerging market or a mature economy in crisis or a recovering mature economy? Talent acquisition & recruitment is the top priority in, Australia and New Zealand () and, while Corporate culture, in the sense of employee relations and change management and performance management, steals the show in. Looking at and North America: Within, Germany concentrates mainly on Talent acquisition & recruitment. France, Poland, Italy and Germany all focus on Corporate culture, while Compensation & benefits is highly relevant in Portugal. In, four priorities are equally relevant: Talent acquisition & recruitment, Compensation & benefits, Corporate culture and Training & development. The main differences between and can be explained by stronger economic growth in the United States. s crisis continues, and this can clearly be seen in the low number of hires in Southern. 43 Employee relations & change management EUROPE 57 Employee relations & change management 56 Performance management By focusing on improving performance, is clearly fighting to maintain its economic strength. 43 Training & development 38 Compensation & benefits Looking at, and Latin America: In Australia, Talent acquisition & recruitment is highly relevant, together with Corporate culture. The n agenda also has Talent acquisition & recruitment at the top, which is explained by this region s escalating need for management skills. Top priorities in are Training & development, followed by Compensation & benefits. However, the survey results show that HR leaders in Brazil place a high value on Talent acquisition & recruitment. LATIN AMERICA 57 Training & development 55 Compensation & benefits 48 Employee relation & change management «Clearly the economic crisis is currently affecting most developed countries. Regardless, the search of Talent is always the no.1 goal in organisations with great optimism and which have a vision of developing a fully universalized and global economy.» 42 Performance management NORTH AMERICA 52 Talent acquisition & recruitment 49 Compensation & benefits 47 Employee relations & change management 47 Training & development (Australia and New Zealand) 57 Talent acquisition & recruitment Didier Guillot, HR Director L OREAL ESPAÑA, Spain 56 Employee relations & change management 51 Performance management 43 Training & development 12 13
8 MICHAEL PAGE PLANNING TO HIRE IN KPIs MEASURED TO ASSESS RECRUITMENT EFFICIENCY (in % of respondents; multiple responses possible) ASIA TALENT ACQUISITION Even if the task of talent acquisition and recruitment does not rank first in all countries, most companies will proceed with recruitment plans in 2013 with 90% of companies outside hiring. The picture within is mixed, with only 76% of companies planning to hire and marked differences between countries. Dismal economic growth in southern is reflected in low hiring intentions in Italy, Spain and Portugal. 14 is definitely preparing for growth that is already taking place: there are fewer planned hires for temporary positions (around 30%) and interim projects (around 20%) Number of hires Number of vacancies Time needed to fill a position Not measured LATIN AMERICA Higher hiring intentions in the UK, Germany, France and Benelux could be both an indication of a replacement strategy for ageing employees and a sign of preparation for growth. In, the highest hiring levels (around 68%) will be for permanent positions, with Russia leading, closely followed by Turkey (95%), UK (91%) and Germany (91%). Number of hires Number of vacancies Time needed to fill a position Not measured EUROPE A VITAL NEED One major HR challenge remains constant throughout the world: the process of finding talented employees and winning them over to the company continues to be an inherent task for HR departments, putting talent acquisition high on the HR leader s agenda Number of hires Number of vacancies Time needed to fill a position Not measured NORTH AMERICA «Talent acquisition is a key priority for Alliance Boots with the key driver being business expansion/growth.» Carmelo Spinella, Divisional Director of Human Resources, Alliance Healthcare - Alliance Boots Group, Italy Number of hires Number of vacancies Time needed to fill a position Not measured Number of hires Number of vacancies Time needed to fill a position Not measured 90% of the companies outside are planning to hire in
9 MEANS USED TO RECRUIT (in % of respondents; multiple responses possible) TALENT ACQUISITION BUT ALWAYS A TOUGH CHALLENGE Online job boards Own company site Recruitment consultancies Social media platforms Employee referral incentives Employer branding campaigns Print media HOW WOULD YOU RATE THE SEARCH FOR QUALIFIED CANDIDATES? The challenge: recruitment According to the survey, half of the organisations find the search for qualified candidates Very difficult or Difficult. Only a minuscule 1% find it Very easy. This general pattern applies to most regions and sectors, with the exception being Australia. Despite the challenges in recruiting talent, many organisations lack key performance indicators (KPIs) to assess recruitment efficiency. Furthermore, around 23% do not measure recruitment efficiency at all; more specifically 30% in and 14% in and. Lack of measurement is more likely to be found in companies with over 5,000 employees. Those companies that do leverage KPIs mainly focus on: Time needed to fill a position ; this is the main KPI to assess recruitment efficiency This is followed by Number of hires and Number of vacancies The most popular solution: recruitment consultancies The increasing difficulty of finding and recruiting good managers is leading to the adoption of multiple channel sourcing, with the top three solutions being: online job boards (used by 91% of HR leaders surveyed); own company website (84%); and recruitment consultancies (83%). Moreover, according to HR leaders, recruitment consultancies are the best route to finding and recruiting at managerial levels and above. This is true globally across all regions and is consistently found at a country level. As the table shows, use of recruitment agencies far outstrips methods such as referral incentives and print media. Perhaps surprisingly given their growing popularity, social media platforms lag far behind. We can surmise that HR leaders find that working with recruitment professionals brings a guarantee of service, quality and results that can offset the risks associated with recruiting the best managerial talent. «The search for talent and the difficulty of finding it is a global concern. It shows me also that the world is demanding more professionals than it has capacity to offer, and the global economy has been trying to run faster based on this expectation.» Marco Antonio Gomes, Fototica, Human Resources Director Brazil ASIA 37 3 LATIN AMERICA Difficult Very difficult EUROPE 43 7 NORTH AMERICA % Proportion of HR leaders using recruitment consultancies to source managers 47% of HR leaders qualify the search for candidates Difficult or Very difficult 23% of companies have no KPIs to track recruitment efficiencies 16 17
10 MICHAEL PAGE MEANS TO INCREASE EMPLOYEE RETENTION IN 2013 (in % of respondents, multiple responses possible) RETAINING EMPLOYEES IS IT TIME FOR A FRESH APPROACH? Compensation & 43 benefits $ Training & development HR leaders know it isn t easy to keep employees satisfied with their current working environment, to support their personal goals, sustain a positive and informed working environment and keep motivation levels high. 93% of HR leaders search for ways to keep employees happy within the company. Training & development and Compensation & benefits are the main instruments being leveraged for employee retention: Training & development : over 50% of HR leaders in, and and more than 60% in and n countries plan to increase employee retention in 2013 through training and development, especially in the leisure industry, which plans to step up staff training. The survey shows, however, that training is still focused on employees hard skills rather than on developing soft skills such as leadership and management training that would actually help to retain managers. Compensation & benefits : perhaps because offering improved compensation and benefits is the most difficult to implement, only 47% of companies plan to make it part of their strategy. However, there are strong regional differences. In the young n and n economies, over half of the companies plan to use improved compensation and benefits. This could be because they have more scope to increase remuneration or due to the rewards battle already being waged between competing organisations. Internal communication, Internal mobility and Employer branding : these aids to retaining employees round out the rankings and are more prevalent in big companies, within the financial services, retail, technology and consumer goods sectors. THE TWO MOST CHALLENGING POLICIES TO IMPLEMENT EUROPE ASIA 35% «Managers are at the heart of our retention strategy. They are requested to push both teams performance and well-being. Managers are provided with training to support their goals, and we have put in place a bonus system based on these personal objectives.» Stéphane Fayol, Human Resources Director, Terreal, France Compensations & benefits 15% Work life balance LATIN AMERICA Compensations & benefits Work life balance 24% 27% Compensations & benefits 18% Work life balance NORTH AMERICA 18% 36% Compensations & benefits Life Work 38 Work-Life balance 44 19% 19% Compensations & benefits 22% Work life balance 55% of companies plan to offer Trainings to increase employee retention 28% of HR leaders declare that Compensation & Benefits will be the most challenging measure to implement Work life balance 19
11 RETAINING EMPLOYEES TIME TO THINK DIFFERENTLY MEASURES TAKEN TO ENSURE WORK-LIFE BALANCE (in % of respondents; multiple responses possible) Time compensation for extra hours Supporting work life balance as an employee retention practice The value of time is on the rise 81% of companies provide their staff with options to improve their work life balance. Compared with other regions, do more for their employees in terms of offering a wider range of solutions. At the country level, the same is true for Germany. From an industry perspective, retail lags behind in the number of solutions offered. Taken as a global average, 57% of the companies in the survey are trying to support employees work life balance by compensating overtime with time off. Following time compensation, organisations are offering: Health and wellness programmes with, South and leading the way. In, these programmes are significantly under-represented. Home office letting staff work from home is a valid means for a third of the companies especially in and in Germany, within the technology, health care and consumer goods sectors. Time-management training is provided by only a quarter of the companies surveyed, while nursery provision or parental leave is offered by only a fifth. The low ranking of Home office and Nursery/Parental leave indicates that working conditions are not yet as flexible as they need to be in some markets. Companies are finally starting to understand just how valuable time is to their employees and to utilise the positive effect this has in keeping staff satisfied and motivated. «2012 saw Reduction in Force activity globally as well within EMEA resulting in more work with less resources it is certainly putting a strain on work / life balance enacting technology enablers, relooking at shared service centres & keeping the communication channels open» Brian Kiel, HR Director, Middle East & Africa, Boart Longyear, Switzerland Health and wellness programmes Home office Time-management training Nursery school / parental leave None
12 THE PEOPLE BEHIND THE PEOPLE HR LEADERS 22 23
13 THE HR JOB DESCRIPTION FUNCTIONS WITHIN THE SCOPE OF THE HR DEPARTMENT S WORK (in % of respondents; multiple responses possible) From a comprehensive list, respondents selected the following as the five main functions that fall within HR leaders scope of work: 1. Talent acquisition & recruitment ranks first across all regions 2. Corporate culture (includes employee relations and change management) 3. Training & development 4. Defining HR standards & policies 5. Compensation & benefits Corporate social responsibility (CSR) is often cited as another role for HR leaders. However, the number of planned campaigns varies from region to region. In, and, over 70% of the companies are planning CSR campaigns, while this share is below 60% in and North America. The top three campaign topics focus on: 1. Sustainable development, which is especially important in 2. Charity, which is a main focus in 3. Diversity, which is emphasised in Within, Sustainable development campaigns are more frequently planned in the Netherlands, Belgium and France, and are an important focus in Canada too. Campaigns around Diversity are mostly planned in Spain, with this country having put a strong focus on diversity in recent years. TALENT ACQUISITION & RECRUITMENT 86% TRAINING & DEVELOPMENT 77% COMPENSATION & BENEFITS EMPLOYEE RELATIONS & CHANGE MANAGEMENT 82% DEFINITION OF HR STANDARDS & POLICIES 81% 86% of surveyed HR leaders manage Talent Acquisition 77% 64% of companies are planning CSR campaigns in
14 COMPENSATION & BENEFITS (in % of respondents; optional indications) 40 <EUR 60k <USD 74k EUR 60 89k USD k HR LEADER DESCRIPTION 12 The question of compensation The numbers are quite compelling from region to region... In and, more than one third of HR leaders take home less than EUR 60,000/USD 75,000 per annum. in Switzerland, Germany and the Netherlands. However, the weaker an compensation level is mostly influenced by Portugal, Russia, Poland, Turkey and France, partly due to the younger age structure in these countries. EUR k USD k EUR k USD k In the other regions, HR leaders earn more: Income levels of EUR 150,000/ USD 185,000 and above are achieved in (26% in total) and in (23% in total). and are both in the middle of the high-compensation road at 18% in total. Surprisingly, has fewer than one in ten high-earning HR leaders. As expected, the highest income levels in are attained Annual compensation is strongly dependent on company size. The bigger the company and the HR department, the better its HR leaders are paid. The type of industry also plays a role: HR leaders are best paid in the traditional sectors of financial services, energy and consumer goods. At the other extreme, the lowest incomes are found in the service sector (business and retail). EUR k USD k >EUR 200k >USD 250k
15 VARIABLE SHARE <5% % HR LEADER DESCRIPTION % There are also some significant differences in the proportion of compensation that is variable: In, and, about 40% of HR leaders have very low variable compensation, which is a much higher percentage than in and. When we compare the regions, is in pole position. One out of four HR leaders enjoys the region s high variable share of more than 20%. In line with the general compensation structure mentioned above, the variable share is lowest in smaller companies and highest in big companies. In the public sector, the variable element is extremely low, while it is higher in the financial services, consumer goods and energy sectors % >20%
16 NEW TOOLS SHAPING TOMORROW S HR USE OF SOFTWARE IN HR FIELDS (in % of respondents; multiple responses possible) PAYROLL STAFF ADMINISTRATION Cutting-edge tools are key to success and the use of external and internal software continues to be common practice in HR, showing an increase in all areas over the last decade. Our results also show that Human Resources Information Systems (HRISs) have been widely adopted by HR departments: Payroll over 95% of HR leaders surveyed report using a payroll system Staff administration used by 88% in, 79% of HR departments globally Appraisal and Recruitment systems for these functions are used to a lesser extent but are still used by a majority (respectively 63% and 60%) Assessment at 51%, this ranks bottom of the list of systems used While HR is a provider of staff data on-demand for management, it is also undertaking the transformation to becoming a knowledge centre, linking people to business objectives and answering crucial questions. HR has great potential to add corporate value, in addition to its existing knowledge base of traditional legal expertise, for instance, and compensation and benefits. To fulfil this role, HR leaders need to adapt to changes and develop ongoing training for HR teams in 95% APPRAISAL 63% ASSESSMENT 79% RECRUITMENT 95% using new tools. 51% 60% of HR leaders are using information systems to handle tasks 30 31
17 NEW TOOLS SHAPING TOMORROW S HR One of the major developments that HR leaders have to take on board in day-to-day business is the deployment of outsourcing. As the chart shows, the HR areas that are typically outsourced are varied, starting with Payroll and ending with HR communication & event management. The use of outsourcing strongly depends on region. (Brazil) has a higher tendency to outsource HR services, while are at the opposite end of the scale. In, we see some countryspecific differences: Belgium, Turkey, Italy and Portugal have a higher tendency to outsource. In contrast, France, Germany, Switzerland, the UK and Russia have comparatively low overall outsourcing scores. Of course, company size and sector also have to be taken into account: Small companies (1 99 employees) are more likely to outsource more areas especially Payroll, Training and Temp operations. Big businesses (1,000+) outsource Assessment and plan to include Payroll, HR information and Temp operations. Payroll is more outsourced (50%) in financial services, healthcare and technology. Temp operations are outsourced more in consumer goods and energy, with the latter sector also outsourcing Talent acquisition & recruitment. Assessments are used by 80% of the companies in the survey. The culture of assessing employees varies among an countries: with as many as 90% of employers from Belgium, France and Russia undertaking assessments, and only between 60% and 70% in Germany, Italy and Spain. Bigger companies and the financial services and retail sectors place a greater emphasis on assessments. «In bigger HR structures, the ongoing demand for better quality and fulfilment of additionally tasks (e.g. war for talents) and the desired cost reductions (e.g. payroll, appraisal) will change the roles dramatically. To achieve these targets, a better software technology is an indispensable condition.» Roland Jüttner, Director Human Resources, Business Group Conductors & Copper Solutions, LEONI Draht GmbH OUTSOURCED HR AREAS PAYROLL TEMP OPERATIONS TRAINING ASSESSMENT HR INFORMATION TALENT ACQUISITION & RECRUITMENT
18 MICHAEL PAGE HR PEOPLE GENDER OF HR LEADERS SURVEYED EXPERIENCED & INTERNATIONAL 54% 60% When it comes to age, 60% of HR leaders are between 35 and 49 years across all regions. Younger HR leaders have a better chance of reaching a managerial position in compared to the other regions. Within, there are slight differences between the countries: Poland, Portugal, Russia and Turkey have a younger age structure. A career path for women Likewise, in small and mediumsized companies, HR leaders tend to be slightly younger. Interestingly, industries do not differ very much in this area, apart from the manufacturing sector. Here, stronger male representation is to be found in the HR department, and also in the company as a whole. 34% of HR leaders as high as 42% in are very experienced, having clocked up more than ten years in their current position. In the region, Brazil has more experienced HR leaders than Mexico. Within, the share of very experienced HR leaders is highest in Germany, Italy and Turkey. France, Switzerland and the UK have a higher share of less experienced HR leaders. In companies with 5,000+ employees, the share of leaders with short-term experience is higher than in smaller companies. 58% of HR leaders have experience of working abroad. Think globally, act regionally As an effect of globalisation and the fact that we are seeing stronger and sharper regional differences, HR leaders must be able not only to design global processes but to implement them in a regionally differentiated manner. 66% Globally, 59% of HR leaders are women. However, there are regional differences, as can be seen in the chart. Company size also has a bearing: whereas in small and medium-sized companies, the share of women is around 60%, in companies of 1,000+ employees it is only 45%. 69% AGE OF HR LEADERS The share of women at the senior level is above the men s share in the higher echelons, such as HR director or HR vice president, with women forming 52%, according to our survey, with and North America leading the way (respectively 70% and 64%). When it comes to moving up the career ladder, women in HR have the edge over their sisters in other company functions. Taking finance as an example: our last global survey on CFOs (Michael Page CFO Global Barometer 2012) showed that fewer than 15% were female, with a very low 5% in. 46% < > % EXPERIENCE OF HR LEADERS >10 years «It is also important to get a right balance between HR business partners & functional HR people. One has to support the other.» Ricky Long, Regional Senior HR Director of Atmel, Hong Kong of HR leaders are women 52% of HR Directors are women HR LEADERS WITH EXPERIENCE OF WORKING ABROAD 61% ASIA 59% EUROPE 50% 54% LATIN AMERICA NORTH AMERICA 72% 33% of HR leaders hold their position for over 10 years 34 35
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